I thank the Ceann Comhairle for giving me an opportunity to continue to discuss the important role of the IMF in what is going on in this country. This debate is taking place in the context of the international economic crisis and, particularly in recent weeks, the euro crisis across the European Union. Many people in the IMF share our concerns and our differences of opinion with the ECB on the debt issue. The discussion on this matter should be developed further.
International economic commentators constantly remind us that if we are going to resolve our financial crisis, we still have the debt issue hanging around our necks and austerity programmes will not work. It is important when the Minister goes on the international and European stage that he raises this issue about our debt before it screws the country and wipes us all out. We need to get away from the myth that austerity will solve our economic crisis. Job creation and assisting small businesses, principles supported by most international economic commentators, are what will solve the crisis.
The Bretton Woods Agreement was first drawn up in 1944 during the Second World War between 44 countries and named after the US town in which it was signed. Its aim was to create stability between countries by creating an international basis for exchanging one currency for another. It also led to the creation of the International Bank for Reconstruction and Development, the World Bank and the International Monetary Fund. In an effort to free international trade and fund post-war reconstruction, the Bretton Woods Agreement member states agreed to fix their exchange rates by tying their currencies to the US dollar which was linked to gold at that time. Nations also agreed to buy and sell US dollars to keep their currencies within 1% of the fixed rate. The architects of the system wanted a set of monetary arrangements that would combine the advantage of the classical fixed-exchange rate gold standard with the advantage of floating exchange rates while avoiding their defects.
The terms "reconstruction", "stability" and "development" are now apt in any debate about our economy. To reconstruct our economy, we cannot penalise the poorer sections of society. Every Member must face up to the fact that those with the most money and most resources must take the most hits.
During my earlier contribution yesterday, the Minister for Finance, Deputy Noonan, agreed with me about the recent well-costed and thought-out proposals for regenerating the sugar industry which could create up to 5,000 jobs. This country needs to restructure and reorganise itself.
The 2010 reform package of the Bretton Woods Agreement builds on the 2008 reform package. The 2008 reforms strengthened the representation of growing economies, many of which are emerging market countries, and enhanced the voice and participation of low-income countries through a near-tripling of basic votes. The 2010 reform also means an increase in Ireland's quota. It is about making the IMF more democratic and open.
It is important the views of all Members are listened to when discussing the governance of the IMF. Many want it to be more democratic and inclusive. While we are faced with an international economic crisis, we need to end the policy of austerity and start creating jobs and developing the economy.
